Mixue shares extend slide after profit drop as drinks chain sees costs rise
Mixue Group shares dropped following a 14.7% decline in first-half profit, attributed to rising operational and marketing costs. Despite the profit dip, the company continues to expand its massive global store network.
Why it matters
Mixue's aggressive global expansion and unique business model make it a key case study in the international scaling of Chinese retail brands.
Shares of Chinese ice cream and beverages chain Mixue Group fell more than 7% in Hong Kong on Friday, extending losses to a second straight session after the company reported a decline in first-half profit.
The stock closed 8.37% lower on Thursday, when Mixue reported that profit for the period fell 14.7% year on year to 2.32 billion yuan ($345.2 million) for the six months ended June. Revenue rose 2.3% to 15.22 billion yuan.
The company also proposed a special dividend of 2.65 yuan per share, subject to shareholder approval.
Mixue's profitability came under pressure from rising costs and expenses. Cost of sales grew faster than revenue, primarily due to investments aimed at improving product quality, while selling and distribution expenses jumped 22.9% on higher marketing and staff costs, the company said. Administrative expenses also rose 39.4%, mainly due to higher staff costs.
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